Notice of Execution and Clearing Agreement

Transcription

1 /17/2018 Notice of Execution and Clearing Agreement 1. This Notice applies only to persons who are parties to the Customer Agreement Among Customer, Interactive Brokers (U.K.) Limited and Interactive Brokers LLC ("IB UK Customer Agreement") and/or persons who have opened an account ("IB UK Account") with Interactive Brokers (U.K.) Limited ("IB UK Customers"). 2. Interactive Brokers (U.K.) Limited ("IB UK") has been authorised by the Financial Conduct Authority ("FCA") to conduct investment business in the U.K. and Europe and is regulated in the U.K. by the FCA. The FCA has its address at 25 North Colonnade, Canary Wharf, London E14 5HS, United Kingdom. 3. Interactive Brokers LLC ("IB LLC") is a U.S.-located affiliate of IB UK. IB LLC is registered as a brokerdealer with the U.S. Securities and Exchange Commission and as a futures commission merchant with the U.S. Commodity Futures Trading Commission. 4. IB UK and IB LLC are parties to an Execution and Clearing Agreement pursuant to which IB LLC performs certain services with respect to IB UK Customers, IB UK Accounts and IB UK Transactions ("Execution and Clearing Agreement"). The Execution and Clearing Agreement permits IB LLC to satisfy its obligations thereunder by using the services of other affiliates of IB UK ("IB UK Affiliates") or unaffiliated third parties. By executing an IB UK Customer Agreement, an IB UK Customer enters into a contractual relationship with IB UK and, for the limited purposes stated therein, with IB LLC. The relationships between IB UK Customers and IB UK and between IB UK Customers and IB LLC are not altered by the Execution and Clearing Agreement. 5. This Notice is intended to be a general disclosure of the relationship between IB UK and IB LLC, not a definitive enumeration of each and every service that may be performed by IB LLC with respect to IB UK Customers, IB UK Accounts and/or IB UK Transactions. Such services may include the performance of any or all of IB UK's responsibilities under the terms and conditions of the IB UK Customer Agreement, although nothing in this Notice obligates IB LLC or other IB UK Affiliates to perform such services. The relationship between IB UK and IB LLC or other IB UK Affiliates may change from time to time. 6. IB UK generally shall be responsible for the following: A. Obtaining and verifying new IB UK Customer and IB UK Account information and documentation and opening and closing IB UK Accounts. B. Facilitating IB UK Customers' access to IB LLC through the Interactive Brokers System with a view to IB LLC receiving and accepting orders (and modification and cancellations in relation to the same) from IB UK Customers for the specified securities, options, futures, currencies and other investment products that may be available from time to time for IB UK Customer trading and arranging for the execution and/or clearance of such orders. IB LLC is responsible for the receipt of orders by IB UK Customers. C. Accepting instructions regarding voluntary corporate actions (e.g., tender or exchange offers) from IB UK Customers and transmitting them to IB LLC for processing. Neither IB UK nor IB LLC shall be responsible for providing IB UK Customers with notice of voluntary corporate actions. D. Determining the commissions and other fees charged to IB UK Customers. Commission and fee payments owed by IB UK Customers may be shared and allocated between IB UK and IB LLC as IB UK and IB LLC agree from time to time. Page 1 / 41

2 7. IB LLC generally shall be responsible for the following: A. Receiving and accepting IB UK Customer orders (and modifications and cancellations thereof) and transmitting them for execution on various exchanges through IB LLC, IB UK, another Interactive Brokers Group affiliate or a third party intermediate broker. Pursuant to the IB UK Customer Agreement, IB UK and IB LLC reserve the right to reject any IB UK Customer order that may be transmitted to either of them for execution and/or clearing. B. In the case of any IB UK Account for which IB UK has agreed to provide clearing services for the Customer, acting as a self-clearing broker for the Customer's orders or arranging for the clearing and settlement of the Customer's executed transactions by IB UK, IB LLC, another IB UK Affiliate or a third party. IB UK Customers that hold IB UK accounts for which IB UK acts only as an executing broker are required to be either a self-clearing exchange member or a client of an exchange clearing member. The exchange-executed trades of such IB UK Customers are taken up for clearing and settlement by the IB UK Customers' respective clearing brokers. C. Performing certain cashiering, client money and custody services for IB UK Customers, IB UK Accounts and IB UK Transactions. Such services include, without limitation: (1) accepting and holding all money submitted to fund IB UK Accounts (including, without limitation, funds submitted for the purpose of satisfying IB UK's initial and maintenance margin requirements [collectively, "Margin Requirements"]); (2) receiving, delivering and transferring securities purchased and sold, borrowed and loaned and receiving and distributing payment therefor; (3) holding in custody and safekeeping all securities and payments so received (provided that, with respect to securities, such securities are delivered via the book entry system of a clearing organization acceptable to IB UK); (4) paying and charging interest on IB UK Accounts; (5) receiving and distributing dividends and other distributions; (6) processing securities as a result of corporate actions; (7) transferring funds to Customers; and (8) as set forth in the IB UK Customer Agreement, effectuating the liquidation of IB UK Customer positions or assets. D. Extending credit to IB UK Customers, including complying with the Margin Requirements of IB UK and any relevant regulatory, self-regulatory or governmental body; and effecting stock loan and borrowing transactions in accordance with applicable law. E. Performing certain collection services with respect to IB UK Accounts, including the collection of all commissions and fees and other monies or assets due from IB UK Customers under the terms of the IB UK Customer Agreement. F. Performing certain back-office and record keeping and reporting functions with respect to IB UK Accounts, including the preparation of confirmations (contract notes) and account statements for IB UK Transactions, distributing such confirmations and account statements directly to IB UK Customers, maintaining books and records of all IB UK Transactions, and reporting such information as may be required by relevant regulatory or self-regulatory organizations or applicable law. G. Performing technical services related to the IB Trader Workstation, the IB System, or certain computer hardware or software related thereto. 8. IB UK requires IB UK Customers to remit all funds related to their IB UK Transactions or to their IB UK Accounts, or otherwise tendered pursuant to the IB UK Customer Agreement, either: (a) directly to IB LLC or (b) to a designated financial institution with which IB LLC maintains a customer account. Funds maintained by IB LLC are maintained in customer accounts that are held in the name of IB LLC and are located outside of the U.K. 9. IB UK and IB LLC share responsibility for the provision of certain portions of the IB UK website and for the provision of customer service facilities. IB UK has ultimate responsibility for responding to customer complaints regarding any IB UK Transaction or any IB UK Account, but IB LLC is authorized to accept, process and respond to such complaints. 10. IB UK and IB LLC are authorized to disclose information or documentation relating to IB UK Customers or IB UK Accounts and IB UK Transactions to each other and to their respective affiliates. IB UK, IB LLC Page 2 / 41

3 and their affiliates are authorized to use, store, or process personal information provided by IB UK customers (or their employees, agents or representatives) or otherwise acquired from them as set forth in the IB UK Customer Agreement. 11. IB LLC does not control, audit or supervise the activities of IB UK or its registered representatives, nor does it verify any information provided by IB UK regarding any IB UK Customers or Accounts. Interactive Brokers (UK) Limited Customer Agreement 1. Application of this Agreement: A. Scope of this Agreement: This Agreement ("Agreement") governs the relationship between Customer and Interactive Brokers (UK) Limited ("IB UK") and between Customer and Interactive Brokers LLC ("IB LLC") including, without limitation, the terms and conditions of the performance of the services set forth in Section 1.B of this Agreement and matters relating to Customer's IB UK account. B. Services Provided: i. IB UK shall provide the following services to Customer: (a) Through the Interactive Brokers System ("IB System"), IB UK shall facilitate Customer's access to IB LLC with a view to IB LLC receiving and accepting orders from Customer for the specified securities, options, futures, and other investment products that may be available from time to time to the type of customer account for which Customer has been approved. IB LLC is responsible for the receipt of orders by Customer. (b) Through its execution and clearing agreement with IB LLC ("Execution and Clearing Agreement"), IB UK shall provide for the execution and clearing of such transactions ("Transactions"). Pursuant to the Execution and Clearing Agreement, Transactions may be executed and/or cleared by IB UK, IB LLC, another affiliate of IB UK, or a non-affiliated third party. ii. As set forth in Section 10 of this Agreement, IB LLC shall provide client money and custody services for Customers and, with respect to the provision of such services only, Customer shall be a customer of IB LLC, and not of IB UK. With respect to the provision of all other services under this Agreement, Customer shall be a customer of IB UK. IB LLC is located in the United States. C. No Advice, Solicitation, or Discretion: Representatives of IB UK and IB LLC are not authorized to, and shall not be under any obligation to provide, any investment, tax, trading or other advice or recommendations or to solicit orders. None of the information, research, or other materials provided by IB UK, provided by any of IB UK's affiliates (IB UK affiliates, including IB LLC, shall be collectively referred to as "Affiliates") or on the IB UK website constitutes advice, a recommendation or a solicitation to buy or sell securities, options, futures or other investment products. Neither IB UK nor any of its Affiliates have any discretionary authority with respect to any Transactions entered into by Customer, except for the discretion to select the marketplace to which to route a Customer order described in Section 3.B.(2) of this Agreement and Customer retains full responsibility for making all trading decisions with respect to Customer's account. D. Treatment of Customer: Unless Customer has been specifically notified in writing to the contrary, IB UK shall treat Customer as a retail client for the purposes of the rules of the Financial Conduct Authority ("FCA Rules"). Customer has the right to request a different client categorization, although IB UK is not bound to agree to such request. However, if IB UK agrees and Customer is recategorized, Customer would lose the protection afforded by certain FCA Rules. E. Amendments to this Agreement: No provision of this Agreement can be amended or waived by Customer, in any respect, except in a writing by an officer of IB UK that has been confirmed by IB UK's secretary (or, in the case of Section 10 of this Agreement, in a writing by an officer of IB LLC that has been confirmed in writing by IB LLC's Secretary) and, in entering into this Agreement, Page 3 / 41

4 Customer has not relied on, or been otherwise induced by, any matter not contained in such writing. IB Customer Service Department employees are not authorized to amend or to waive the terms of this Agreement in any respect. Customer understands and agrees that IB UK or IB LLC may modify or change the terms and conditions of this Customer Agreement (in each instance, a "Revised Agreement") by providing Customer with notice of a Revised Agreement via . The terms and conditions of any Revised Agreement shall be deemed to be accepted by Customer and the Revised Agreement shall become effective five (5) business days after the date of the notice to the Customer ("5 Day Period") unless, within the 5 Day Period, Customer has sent a written notice of objection via an to the IB Customer Service Department at help@interactivebrokers.com and IB UK has received such objection. If Customer objects to any term or condition of any Revised Agreement, Customer must promptly cease using the services of IB UK and IB LLC, except as necessary to close Customer's account. Customer's continued use of the services of either IB UK or IB LLC after the 5 Day Period also shall constitute acceptance of the terms and conditions of the Revised Agreement. 2. Applicable Regulations: A. This Agreement and any orders or Transactions placed or executed under it are subject to all applicable laws and regulations including, without limitation, the constitutions, articles, by-laws, rules, regulations, policies, procedures and interpretations (collectively, "Rules") of the exchanges, markets and clearing houses to which orders are routed or Transactions are executed or cleared; of the Financial Conduct Authority ("FCA"); and any other applicable Rules of a regulatory, selfregulatory or governmental authority ("Applicable Regulations"). IN NO EVENT SHALL IB UK OR ANY OF ITS AFFILIATES BE LIABLE TO CUSTOMER FOR ANY ACTION, INACTION, DECISION OR RULING OF ANY EXCHANGE, MARKET, CLEARING HOUSE OR REGULATORY OR SELF- REGULATORY AUTHORITY. B. IB UK or its Affiliates may take or omit any action they consider reasonable to comply with Applicable Regulations. Customer specifically acknowledges that exchange Rules may afford the exchange wide powers in various situations, including, but not limited to, in an emergency, in an otherwise undesirable situation, or in the event of a default (not necessarily on the part of IB UK, IB LLC, their Affiliates, or Customer), to close-out a transaction, to require the exercise of set-off rights or to take such other steps or combination of steps as the exchange thinks fit. Customer agrees that, if a relevant exchange (or intermediate broker acting at the direction of, or as a result of any action taken by, any exchange) takes any action which affects any Transaction, then IB UK or its Affiliates may take any action which IB UK or its Affiliate, in its absolute discretion, considers desirable to respond to such action or to mitigate any loss incurred as a result of such action. Any such action taken by IB UK or its Affiliates will be binding on Customer. In no event shall IB UK or its Affiliates be liable to Customer for any action, inaction, decision or ruling of any exchange, market, clearing house or regulatory, self-regulatory, governmental or supra national authority. 3. Customer Orders: A. Responsibility for Customer Orders and Customer Trades: IB UK and its Affiliates shall be entitled to act for Customer upon any instructions given or purported to be given by Customer. Once given, instructions may only be withdrawn by Customer with consent. Customer understands that neither IB UK nor any of its Affiliates is able to know whether someone other than Customer has entered, or is entering, orders using Customer's user name and password. Unless specified to and agreed to by IB UK, Customer shall not permit any other person to have access to Customer's account for any purpose. Customer shall be responsible for the confidentiality and use of, and any Customer orders entered with, Customer's user name and password. Customer agrees to report any loss or theft of Customer's user name or password, or any unauthorized access to Customer's Page 4 / 41

5 account, immediately by to the IB Customer Service Department at However, Customer shall remain responsible for all orders entered using Customer's user name and password. B. Order Routing: i. Unless otherwise directed by Customer, IB UK and its Affiliates have the discretion to select the marketplace to which to route any Customer order. To the extent that IB UK or any of its Affiliates provide execution services for Customer, it shall provide best execution in accordance with Applicable Regulations. ii. For investment products that are traded at multiple market centers, IB UK may provide an order-by-order best execution order-routing option whereby the IB System attempts to seek the best available terms for a Customer's order using a proprietary, computerized routing algorithm ("Smart Routing"). Customer is advised to choose Smart Routing when trading products for which Smart Routing is available. If Customer elects to direct orders to a particular market center, Customer assumes responsibility for examining and directing Customer's trading in accordance with the relevant Rules of the market center to which the orders are routed (e.g., Rules regarding trading hours, bidding and offering, types of orders accepted, short sale restrictions, odd-lot trading restrictions, etc.). Customer acknowledges that, if Customer elects to direct orders to a particular market center, Customer does so at Customer's risk, including the risk that such orders may be executed on less advantageous terms. iii. IB UK and its Affiliates cannot and do not warrant or guarantee that every Customer order will be executed at the best posted price. Among other things: (a) neither IB UK nor its Affiliates may have access to every market at which a particular product may trade; (b) other orders may trade ahead of Customer's order and exhaust available volume at a posted price; (c) exchanges or market makers may fail to honor their posted prices; (d) exchanges may re-route customer orders out of automated execution systems for manual handling (in which case, execution or representation of Customer's order may be substantially delayed); or (e) exchange Rules or decisions or systems delays or failures may prevent Customer's order from being executed, may cause a delay in the execution of Customer's order, or may cause Customer's order not to be executed at the best posted price. C. Order Execution: i. IB UK and its Affiliates shall act as agent on Customer's behalf, unless otherwise confirmed. However, IB UK and its Affiliates are authorized to execute Customer orders as principal. IB UK may utilize another executing broker, including an Affiliate or a non-affiliated third party, to execute Customer orders. Such executing brokers shall have the benefit of all of IB UK's rights and remedies and limitations on liability under this Agreement. IB UK or its Affiliates may decline any Customer order, at any time, in their respective sole discretion. ii. IB UK and its Affiliates may decline any Customer order or terminate this Agreement and/or customer's use of the facilities and services provided by IB UK or its Affiliates for the transmission and execution of Customer orders at any time in their discretion. Customer shall be responsible for monitoring all Customer orders until IB UK confirms execution or cancellation of the order to Customer. D. Order Cancellation and Modification: Customer acknowledges that it may not be possible to cancel or modify an order. Any attempt to cancel or modify an order is simply a request to cancel or modify. Neither IB UK nor its Affiliates shall be liable to Customer if IB UK or its Affiliates are unable to cancel or modify an order. Customer further acknowledges that attempts to modify or cancel and replace an order can result in an over-execution of the order, or the execution of duplicate orders, and Customer shall be responsible for all such executions. Page 5 / 41

6 4. Particular Products or Orders: A. Volume Weighted Average Price Orders: IB UK may accept Volume Weighted Average Price ("VWAP") orders for certain securities or futures products. VWAP stock transactions will be executed after the close of trading at the average price for the security during the reference period, as calculated by a third-party pricing service ("Pricing Service"). The average price reported to Customer on the relevant confirmation may not reflect the actual trading level of the security at any point during the trading day, but rather reflects an average price based upon transactions effected during the reference period, as calculated by the Pricing Service. In VWAP transactions, IB UK or IB LLC, as agent or riskless principal, generally will forward the transactions for execution to an IB UK Affiliate which will act as principal in the transaction. Customers entering VWAP orders agree to accept the VWAP price for the reference period as calculated by the Pricing Service. Neither IB UK nor its Affiliates have any control over the methodology used by the Pricing Service to calculate VWAP prices and do not warrant the accuracy of those prices. IB UK and its Affiliates reserve the right NOT to execute a VWAP transaction at the close of trading in the following circumstances: (1) Customer's VWAP order violates exchange Rules or securities or commodities laws, regulations or Rules, or is intended to defraud or manipulate the market; (2) a significant disruption in or premature close of trading in the market on which the security or futures product is traded; (3) acts of God, war (declared or undeclared), terrorism, fire or action by an exchange, regulatory or governmental authority that disrupts trading in the relevant security or the Pricing Service's calculation of the VWAP; or (4) if the Pricing Service's calculation of VWAP prices is clearly erroneous. In such cases, neither IB UK nor its Affiliates shall have any obligation to execute Customer's VWAP order. B. Penny Shares: Customer understands that there is an extra risk of losing money when shares are bought in some smaller companies including penny shares. There is a big difference between the buying price and selling price of these shares. Customer further understands that, if such shares have to be sold immediately, Customer may get back much less than the Customer paid for them. The price may change quickly and it may go down as well as up. C. Warrants and Derivatives: Customer represents that Customer has received, read and understands the "Warrants and Derivatives Risk Warning Notice" set forth as Addendum 1 hereto. D. Commodity Options: Customer acknowledges and agrees that commodity option contracts may not be exercised and must be closed out by offset. Except for cash-settled commodity options, if Customer has not offset commodity options contract positions at least one (1) hour prior to the time specified by an exchange for final settlement, IB UK or its Affiliates are authorized to do so, or to sell any position into which the option position is converted upon expiration, or to otherwise liquidate the resulting positions, and credit or debit Customer's account accordingly. Customer shall pay IB UK or its Affiliates for all costs and expenses related to such liquidations and shall hold IB UK and its Affiliates harmless for any actions taken, or not taken, in connection therewith. E. Close-Out Deadline for Futures Contracts Not Settled in Cash: For futures contracts that are not settled in cash, but are settled by actual physical delivery of the underlying commodity (including those foreign currency contracts that call for actual delivery of the physical currency and are not on the IB Deliverable Currency List). Customer may not make or receive delivery of the underlying commodity. For long positions not settled in cash, Customer agrees to roll forward or to close-out any position by offset three (3) business days prior to the exchange-specified first notice day (the long "Close-Out Deadline"). For short positions not settled in cash, Customer agrees to roll forward or close-out the position by offset three (3) business days prior to the exchange-specified last trade day (the short "Close-Out Deadline"). It is Customer's responsibility to make itself aware of the last trading date for such contracts and the Close-Out Deadline. If Customer has not closed out any position in a futures contract not settled in cash by the Close-Out Deadline, IB UK and its Affiliates shall have the right to liquidate Customer's position in the expiring contract, at any time and in any such manner as IB UK or its Affiliates deem necessary, without prior notice to Customer. Page 6 / 41

7 If Customer fails to close out a futures position and IB UK or its Affiliates are unable to close out the position prior to the expiration of the contract, then Customer shall be liable for any and all costs of delivery and the liquidation of the resulting physical currency position. F. Non-Readily Realisable Investments: Customer understands that there is a restricted market for designated investments that are not readily realisable investments and that, therefore, it may be difficult to deal in such designated investments or to obtain reliable information about their value. Customers who choose to trade designated investments that are not readily realisable investments do so at their own risk. 5. Short Sales: Customer acknowledges that: (A) short sales may only be effected in a margin account and are subject to initial and maintenance Margin Requirements; (B) prior to effecting a short sale for Customer, IB UK, IB LLC or their Affiliate, as the case may be, must have reasonable assurance that it will be able to borrow such stock on Customer's behalf to effect delivery of such stock to the purchaser; (C) if IB UK, IB LLC or their Affiliate, as applicable, is unable to borrow stock to enable Customer to effect delivery on a short sale, or if IB UK, IB LLC or their Affiliate, as applicable, is unable to re-borrow stock in order to satisfy a re-call notice from a stock lender, then IB UK, IB LLC or their Affiliate may be subject to a buy-in pursuant to regulatory or clearing house Rules. Customer understands that, if IB UK, IB LLC or their Affiliate, as applicable, is unable to borrow or re-borrow such stock, or if, for any other reason, IB UK, IB LLC or their Affiliates do not wish to carry Customer's short position, then IB UK, IB LLC and their Affiliates, without notice to Customer, are authorized by Customer to cover Customer's short position by purchasing stock on the open market at the thencurrent market price and Customer shall be liable for any resulting losses and all associated costs incurred by IB UK, IB LLC or their Affiliate. 6. Corporate Actions: Except with respect to proxy materials which IB UK or its Affiliate shall transmit to Customer in accordance with Applicable Regulations, Customer acknowledges that Customer is responsible for knowing the rights and terms of any securities, options, futures, currencies and investment products in Customer's account including, but not limited to, corporate actions (e.g., whether a security is the subject of a tender or exchange offer, a reorganization, a stock split or reverse stock split) and that neither IB UK nor its Affiliates has any obligation to notify Customer of dates of meetings or to take any other action without specific written instructions that have been sent by Customer to the IB Customer Service Department at help@interactivebrokers.com and have been received by the IB Customer Service Department. The consequences of Customer's failure to timely provide such instructions are entirely the Customer's own responsibility. 7. Consent to Electronic Records and Communications: Customer consents to the receipt of electronic instructions, notices, messages, trade confirmations, account statements,proxy materials, key information documents and other records and communications (collectively, "Records and Communications") relating to this Agreement; any other agreement between customer and IB UK, IB LLC or their Affiliates; any of Customer's orders, Transactions or accounts; or any of Customer's dealings with IB UK, IB LLC or any of their Affiliates, in lieu of the receipt of Records and Communications in any other form. 8. Confirmations and Account Statements: A. IB UK or its Affiliates shall provide a summary of the trading activity in Customer's account to Customer on a daily basis. IB UK or its Affiliates shall provide to Customer account statements of Customer's account on a monthly basis. B. IB UK and its Affiliates may elect to confirm the execution or cancellation of any Customer order by the sole methods of transmitting an electronic confirmation to Customer via or through the IB System or, for security purposes, by posting the information on the IB UK website with a notification sent to Customer to login and retrieve the information. Customer agrees to accept electronic trade confirmations in lieu of printed confirmations. Page 7 / 41

8 C. Customer agrees to monitor each open order until IB UK or one of its Affiliates confirms the execution or cancellation of the order to Customer. Confirmations may be subject to delays. Customer understands that reports and confirmations of order executions or cancellations may be erroneous for various reasons including, but not limited to, cancellation or adjustment by an exchange. Confirmations also are subject to change by IB UK or its Affiliates, in which case, Customer shall be bound by the actual order execution, so long as it is consistent with Customer's order. D. Customer agrees to notify IB UK by telephone at the telephone number(s) specified on the IB UK website or by to the IB Customer Service Department at as soon as reasonably possible after Customer has become aware, or should have become aware, that: (1) Customer has failed to receive an accurate confirmation of an execution or cancellation; (2) Customer has received a confirmation that is not consistent with Customer's order; (3) Customer has received confirmation of execution or cancellation of an order that Customer did not place; or (4) Customer has received a confirmation; account statement; or other information reflecting inaccurate orders, trades, account balances, securities, options or futures positions, funds, margin status or transaction history. E. In the event that IB UK or any of its Affiliates confirms an execution or cancellation in error and Customer unreasonably delays in reporting such error, IB UK and its Affiliates reserve the right to require Customer to accept the trade, or to remove the trade from Customer's account, in their respective sole discretion. F. Customer understands and agrees that IB UK or its Affiliates may adjust Customer's account to correct any error. Customer agrees to promptly return to IB UK or its Affiliates, as the case may be, any assets distributed to Customer to which Customer was not entitled. 9. Margin: The following provisions apply to margin-enabled accounts: A. Risk of Margin Trading: Customer understands that trading on margin involves a high degree of risk and may result in a loss of funds greater than the amount Customer has deposited in Customer's account. Customer represents that Customer has read and understands the "Disclosure of Risks of Margin Trading" provided separately by IB UK. B. Requirement to Maintain Sufficient Margin: Customer margin Transactions are subject to IB UK and IB LLC initial margin and maintenance margin in accordance with the margin requirements which have been established by them or the applicable exchange, whichever is greater ("Margin Requirements"). IB Margin Requirements may exceed the margin required by any exchange or clearing house. IB Margin Requirements shall be posted on the IB UK website. The general formulas for calculating Margin Requirements provided on the IB UK website are only indicative and may not accurately reflect the actual Margin Requirements in effect at a particular time for Customer's portfolio. Customer must at all times satisfy whatever Margin Requirements are calculated by IB UK and IB LLC. Customer shall maintain, without notice or demand from IB UK, IB LLC or their Affiliates, a sufficient account balance at all times so as to continuously satisfy the applicable Margin Requirements. As set forth herein, Customer shall submit all payments made by Customer to satisfy Margin Requirements directly to IB LLC in accordance with the instructions then set forth on the IB UK website and then in effect. C. Modification of Margin Requirements: IB UK and/or its Affiliate(s) may modify the Margin Requirements for any Customer, for open and new positions, at any time, in their sole discretion. Customer shall be required to supplement margin any time that IB increases Customer's Margin Requirements. D. Acceptable Margin: Margin shall be provided by or on behalf of Customer in the acceptable forms then listed on the IB UK website and in effect. IB UK reserves the right to alter the acceptable forms of margin, in its sole discretion, by posting the amended acceptable margin forms on the IB UK website. Page 8 / 41

9 E. Failure to Satisfy Margin Requirements: Customer shall monitor Customer's account so that, at all times, the account shall contain a sufficient account balance to continuously satisfy the Margin Requirements, without notice or demand. IB UK or its Affiliates may reject any Customer order if Customer does not have a sufficient account balance to satisfy the Margin Requirements and may delay the processing of any order while determining the correct margin status of Customer's account. Failure by Customer to satisfy the Margin Requirements constitutes an Event of Default and provides IB UK and/or its Affiliate(s) the right, but not the obligation, to pursue all rights and remedies available to it pursuant this Agreement, including the right to liquidate Customer's positions. F. IB UK Shall Not Issue Margin Calls: IB UK, IB LLC, and their Affiliates shall not have any obligation to notify Customer of any failure to meet the Margin Requirements in Customer's account prior to IB UK, IB LLC or any of their Affiliates exercising any of their respective rights and remedies under this Agreement. Customer understands that IB UK, IB LLC, and their Affiliates shall not issue margin calls and that IB UK, IB LLC and their Affiliates shall not credit Customer's account to meet intraday margin deficiencies. Customer understands that IB UK (IB LLC or another IB UK Affiliate) is authorized to liquidate positions in Customer's account in order to satisfy the Margin Requirements without prior notice to Customer. G. Margin Trading Acknowledgement: Customer acknowledges that where credit is extended to Customer pursuant to margin loan facilities provided under the terms of this Agreement, it is likely to exceed a sum equivalent to GBP25,000, at some stage. The maximum amount of the margin loan will be based on the account equity. H. Use of Margin: Customer acknowledges and agrees that: i. IB UK, IB LLC or their Affiliates may use any margin in the form of securities for their own accounts or the accounts of any of their other Customers for the purposes of settling trades, in which event IB UK, IB LLC and its Affiliates shall not be liable for any loss or expense whatsoever that is suffered or incurred by Customer arising out of such use; ii. IB UK may return to Customer (through IB LLC) margin in the form of securities which are equivalent, but not identical to, the securities Customer originally deposited with IB LLC; and iii. Margin in the form of securities may be registered in the name of IB LLC, an IB LLC Affiliate, or such other person as IB LLC may determine. Any investments or documents of title will be held by IB LLC or any third party as IB LLC shall determine in relation to margin in the form of securities. IB LLC, IB UK and their Affiliates shall not be liable for any default by any other person holding such margin. 10. Client Money and Custody: A. IB LLC to Provide Client Money and Custody Services: i. IB LLC shall provide certain client money and custody services for Customer and with respect to Customer's Transactions and IB UK accounts ("Client Money and Custody Services"). The Client Money and Custody Services shall include, without limitation: (a) accepting and holding all money submitted to fund Customer's account (including, without limitation, funds submitted for the purpose of satisfying Margin Requirements; (b) holding Customer's securities and other assets (including, without limitation, collateral and safe custody investments); (c) applying the Margin Requirements to Customer's account; (d) conducting stock lending activity with or for the Customer; (e) crediting Customer's account for any credit interest owed to Customer from IB UK; (f) debiting Customer's account for any daily or debit interest owed by Customer to IB UK; (g) transferring funds to Customer (e.g., upon Customer's request for a Page 9 / 41

10 withdrawal of funds from Customer's account); and (h) under the circumstances set forth in this Agreement, effectuating the liquidation of Customer's positions or assets. ii. Notwithstanding any other services provided by IB LLC to IB UK or to Customer pursuant to the Execution and Clearing Agreement referenced in this Agreement, Customer shall be a Customer of IB LLC, and not of IB UK, for the purposes of the provision of the Client Money and Custody Services only. The terms and conditions of this Agreement shall apply to IB LLC's provision of the Client Money and Custody Services to Customer. Notwithstanding the foregoing, IB LLC may be a third party beneficiary to any portion of this Agreement or any other agreement between IB UK and Customer. B. United Kingdom Client Money and Custody Rules: i. IB LLC is located outside of the United Kingdom and IB LLC may deposit and hold money, securities, and other assets (including, but not limited to, collateral and safe custody investments) on behalf of Customer in accounts that are located outside of the United Kingdom. The legal, regulatory, and settlement regime applicable to IB LLC and to the entities in which Customer's money, securities and other assets will be held will be different from that of the United Kingdom (i.e., any client money and custody Rules promulgated by the FCA will not apply). Among other things, different practices for the separate identification of Customer's money, securities, and assets may apply and, in the event of a default of IB LLC or the entity in which Customer's money, securities and other assets are held, Customer's money, securities and assets may be treated differently from the position that would apply if the money, securities or assets were held in the United Kingdom. ii. To the extent that IB LLC holds Customer money, securities, or other assets, IB LLC will hold such money, securities, and assets in accordance with the rules of the U.S. Securities and Exchange Commission ("SEC") and the U.S. Commodity Futures Trading Commission ("CFTC"), as applicable. C. Use of Another Intermediate Broker, Agent, Settlement Agent, or OTC Counterparty Outside of the United Kingdom: IB LLC may pass money, securities, or other assets held on Customer's behalf to another intermediate broker or agent, settlement agent, or OTC counterparty that also is located in a jurisdiction outside of the United Kingdom. In such circumstances, the legal, regulatory, and settlement regime applying to the intermediate broker, settlement agent, or OTC counterparty with which Customer's money, securities or other assets are held will be different from that of the United Kingdom (i.e., any client money and custody Rules promulgated by the FCA will not apply). Among other things, different practices for the separate identification of Customer's money, securities, and assets may apply, and, in the event of a default of the intermediate broker, settlement agent or OTC counterparty, the Customer's money, securities and assets may be treated differently from the position which would apply if such money, securities and assets were held by an intermediate broker, settlement agent or OTC counterparty in the United Kingdom. D. Submission and Disbursement of Funds: i. Funds to IB LLC: Customer agrees to submit all funds related to any Transaction or to Customer's account or otherwise made pursuant to this Agreement (including, but not limited to, funds submitted to satisfy Margin Requirements) directly to IB LLC or to a designated financial institution with which IB LLC maintains an account, in accordance with the instructions then set forth on the IB UK website and in effect. IB UK reserves the right to amend such instructions, in its sole discretion, at any time, upon notice made by posting the amended instructions on the IB UK website. Page 10 / 41

11 ii. Disbursement of Funds: (a) Funds shall not be disbursed to Customer until after positions are settled and (b) Funds received by cheque shall not be disbursed prior to twelve (12) business days from the date of deposit by IB LLC. E. Delivery: If, at any time, either: (1) Customer fails to deliver to IB LLC or to any of its Affiliates any property previously sold by IB LLC or its Affiliates on Customer's behalf, or fails to deliver any property in compliance with any transaction; or (2) IB LLC or any of its Affiliates is required or reasonably deems it advisable (whether by reason of the requirements of any exchange, clearing organization or otherwise) to replace any property delivered by IB LLC or its Affiliates for Customer's account with other property of like or equivalent kind or amount, then: Customer authorizes IB LLC and its Affiliates, in their respective discretion, to borrow or to buy any property necessary to make delivery of property in compliance with any transaction or to replace any such property previously delivered and to deliver the same to such purchaser or other party to whom delivery is to be made, and if IB LLC or any of its Affiliates borrows or otherwise acquires property from a third party for such purposes, IB LLC and its Affiliates may subsequently pay for, or repay the loan of, such property with securities purchased or otherwise acquired for Customer's account. F. Stock Lending Activity: i. Customer consents to IB LLC and its Affiliates undertaking, or otherwise engaging in, stock lending activity and the lending of Customer collateral, securities or other property (including, but not limited to, safe custody investments) including, but not limited to, using Customer collateral, securities or other property for their own accounts or for the accounts of other Customers, and lending, either to themselves, to their Affiliates, or to others, any Customer collateral, securities and other property held by IB LLC in Customer's accounts. Pursuant to Applicable Regulations, IB LLC or its Affiliates may, from time to time and without notice to Customer, deposit all collateral, securities and/or other Customer property with third parties and may pledge, re-pledge, hypothecate or re-hypothecate, all Customer collateral, securities and/or other Customer property, either separately or together with other securities and/or other property of other Customers of IB UK, IB LLC or their Affiliates, for any amount due to IB UK, IB LLC, their Affiliates or other persons, in any IB UK account in which Customer has an interest. IB LLC or its Affiliates, may so pledge, re-pledge, hypothecate or re-hypothecate Customer collateral, securities and/or other property without retaining in IB LLC's or its Affiliate's possession or under its control for delivery a like amount of similar collateral, securities and/or other property and IB LLC or its Affiliates may return to Customer collateral, securities and/or other property other than the original, or original type of, collateral, securities and/or property that Customer deposited with IB LLC. Collateral that is registered with a third party may not be in Customer's name. ii. To the extent that IB LLC or its Affiliates undertakes any stock lending activity with or for Customer, Customer should be advised that: a. Such activity may affect Customer's tax position and Customer should consult his tax advisor prior to any involvement in this activity; and b. There may be consequences to such activity, including in relation to Customer's rights as holder of the designated investments. G. Interest: IB UK (through IB LLC) shall pay credit interest to Customer and shall charge debit interest to Customer at such interest rates and on such credit or debit balances as are then set forth on the IB UK website. IB UK reserves the right, in its sole discretion, to amend its credit and debit interest policies, interest rates and the frequency with which interest is charged, at any time, upon notice made by posting the amended policies or rates on the IB UK website. Page 11 / 41

12 H. Taxes: IB UK, through IB LLC, may, in its discretion, deduct or withhold from any Customer account or from any amount due to Customer all forms of tax (whether a tax of the United Kingdom or elsewhere in the world and whenever imposed) in accordance with Applicable Regulations. In accounting for taxes or in making deductions or withholdings of tax, IB UK may estimate the amounts concerned. Any excess of such estimated amounts over the final confirmed liability shall be credited to the Customer's account. Any deficiency of such estimated amounts under the final confirmed liability may be deducted or retained from any amounts that IB UK or its Affiliates may owe to, or be holding for, Customer. 11. Cash Account Deficits: If a cash (non-margin) account incurs a deficit for any reason, margin interest will be charged on the debit balance owed by Customer to IB UK until the deficit is repaid. In their respective discretion, IB UK and its Affiliates shall have the right, but not the obligation, to treat a cash (non-margin) account that has incurred a deficit as a margin account, in which case the terms and conditions specified in this Agreement relating to margin shall apply. For any Customer deficit in any account type that remains unpaid, Customer agrees to pay and shall be liable for the reasonable costs and expenses of the collection of the debit balance, including, but not limited to, attorneys' fees and/or collection agent fees. 12. Universal Accounts: A. Customer acknowledges that an IB UK Universal Account consists of two underlying accounts: (1) an account for trading securities and equity options, which is carried by IB LLC pursuant to SEC regulations and (2) an account for trading futures and options on futures, which is carried by IB LLC pursuant to CFTC regulations. Customer understands and acknowledges that the Universal Account is actually two separate accounts for bookkeeping and regulatory purposes. Customer authorizes IB UK, IB LLC and their Affiliates to combine information regarding the separate securities/equity options and futures/options on futures accounts including but not limited to, trade confirmations and position and margin information, into a single statement sent to Customer. B. Customers utilizing IB UK s Universal Account functionality authorize IB UK (through IB LLC) to transfer cash, at any time, between and among any of Customer s underlying securities/equity options and futures/options on futures accounts to cover any obligations (e.g., funds needed for the purchase of investment products) or Margin Requirements in any other of Customer's accounts. Customer acknowledges the right of IB UK and its Affiliates to liquidate positions in any of Customer's underlying securities/equity options or futures/options on futures accounts to cover any deficit in any other account, in accordance with the provisions of this Agreement. C. Customer s utilizing IB UK s Universal Account functionality acknowledge that the funds and positions in the underlying futures/options on futures account are not entitled to any U.S. Securities Investor Protection Corporation ("SIPC") protection nor to any excess SIPC-type insurance coverage that may be provided by IB UK or its Affiliates. 13. Provisions Relating to Multi-Currency Enabled Margin Accounts: A. Operation of Multi-Currency Accounts: The IB Multi-Currency Account function gives IB UK Customers the ability to trade securities or futures contracts that are denominated in different currencies using a single IB UK account that is denominated in a "base" currency of the Customer's choosing. When a Customer purchases a security or futures contract denominated in a currency other than the base currency, a margin loan is established to fund the purchase. This margin loan is secured by Customer funds held by IB UK (through IB LLC) in the Customer's base currency and in other currencies and by Customer's securities and futures contract positions to the extent allowed by law. Page 12 / 41

13 B. Foreign Currency Exchange Transaction Facility: Customers with Multi-Currency enabled accounts may exchange cash funds between the base currency and other currencies through spot foreign exchange transactions executed through the IB system. Customers can use these spot foreign exchange transactions to convert funds to repay margin balances, to convert gains generated on investments denominated in foreign currency back into the base currency, or to take positions in particular currencies for purposes of investment or speculation. C. Foreign Currency Exchange Transactions: For foreign currency exchange transactions executed through IB UK's spot foreign currency exchange facility, IB UK, IB LLC or one of their Affiliates generally will act as agent or riskless principal and may effect such transactions through an IB UK Affiliate, which may earn a profit (or suffer a loss) in connection with such transactions. Customer shall pay a transaction fee to IB UK (through IB LLC) for each foreign exchange transaction, which IB UK (through IB LLC) may deduct from Customer's account. IB UK may modify the transaction fee rates upon notice to Customer via the IB UK website or otherwise. D. Margin: Customer is obligated to maintain sufficient funds in Customer's Multi-Currency enabled account at all times to meet the Margin Requirements set by IB UK, or be subject to liquidation of positions as described in this Agreement. If Customer maintains positions denominated in foreign currencies, the IB system will calculate the margin required to carry those positions by applying exchange rates specified by IB UK and translating the foreign currency margin balances into the base currency specified by the Customer (Customer understands that this is a pro forma calculation - no funds will actually be converted for purposes of margin calculations). IN TRANSLATING THE CUSTOMER'S FOREIGN CURRENCY MARGIN REQUIREMENTS INTO THE BASE CURRENCY, IB UK (THROUGH IB LLC) WILL APPLY "HAIRCUTS" (A PERCENTAGE DISCOUNT ON THE FOREIGN CURRENCY EQUITY AMOUNT) TO REFLECT THE POSSIBILITY OF FLUCTUATION IN EXCHANGE RATES BETWEEN THE BASE CURRENCY AND THE FOREIGN CURRENCY. CUSTOMER THEREFORE MUST CLOSELY MONITOR MARGIN REQUIREMENTS AT ALL TIMES, PARTICULARLY FOR POSITIONS DENOMINATED IN FOREIGN CURRENCIES (BECAUSE CURRENCY FLUCTUATION, IN ADDITION TO FLUCTUATION IN THE VALUE OF THE UNDERLYING POSITION, CAN CAUSE CUSTOMER TO INCUR A MARGIN DEFICIT). E. Foreign Currency Exchange Rates: If IB UK or any of its Affiliates enters into a Transaction that is effected in a currency other than the currency provided by Customer to IB UK (through IB LLC), then any loss arising from a fluctuation in the exchange rate affecting the foreign currency will be at Customer's risk. Upon liquidation of such transaction, IB UK (through IB LLC), in its discretion, may debit or credit Customer's account, in such foreign currency or other currency at the rate then prevailing at the time of the liquidation as IB UK shall reasonably select. F. Right to Refuse Orders: These provisions do not evidence the commitment of IB UK or IB LLC to enter into foreign currency exchange transactions generally or to enter into any specific foreign currency exchange transaction. IB UK and IB LLC reserve the right, exercisable at any time in their sole respective discretion, to refuse: (1) acceptance of Customer's orders, or (2) to quote a two-way market. G. Authorization to Transfer Funds: Customer agrees that IB UK (through IB LLC) may transfer to or from Customer's regulated securities/equity options account or futures/ options on futures account(s) from or to any of Customer's non-regulated foreign currency account, funds or securities that may be required to avoid margin calls, reduce debit balances or for any other reason that is not in conflict with Applicable Regulations. H. Netting Provisions: i. Netting by Novation. Each foreign currency transaction made between Customer and IB UK, IB LLC or any of their Affiliates will immediately, upon its being entered into, be netted with all then existing foreign currency transactions between Customer and IB UK, IB LLC and their Affiliates for the same currencies so as to constitute a single foreign currency transaction. Page 13 / 41